Literature Review Women on boards and in TMTS and firm performance 25 considered as a symbol or token Kanter 1977 The theory of tokenism implies that filling a vacant position with a token employee is usually driven by the motivation to create the appearance of di versity and is thus a purely symbolic act The pre valent dominant group in this case males will strive to heighten the barriers between themselves and the minority group females Women being the minority have to cope with the resulting ef fects they are often assumed to be insufficiently qualified not taken seriously doubted or not trus ted Arfken Bellar Helms 2004 Kanter 1977 Torchia Calabro Huse 2011 As a result being labelled as a token leads to feelings of discomfort isolation or self doubt Torchia et al 2011 All these effects would adversely affect cooperation within the board The various effects above are all suitable to have an impact on firm performance It is nevertheless essential to examine direct links between gender diversity on the board and firm performance and firm value respectively 2 3 Gender diversity on corporate boards and in TMTs and firm performance 2 3 1 Overview relevant research to date With regard to board composition and firm per formance an early empirical analysis conducted by Hermalin and Weisbach 1991 indicates that there appears to be no link The authors note that even if there was a relation it would be small with little economic significance Board composition is investigated in terms of directors origin that means inside versus outside directors the gender of board members is not considered They provide as one possible explanation that board composi tion does simply not matter but admit inconsis tency with the then growing literature suggesting that outside directors have a decisive impact on monitoring management Conducting a survey of economic literature on the composition of boards Hermalin and Weisbach 2001 confirm their pre vious conclusion board composition appears not to be related to corporate performance Board size on the other hand appears to be negatively related to corporate performance However both board com position and size do appear to be related to the quality of certain decisions of the board and firm performance appears to be one important factor affecting changes to boards Hermalin Weisbach 2001 Literature has grown further during the past two decades and several studies find a relationship between board composition and firm performance The impact of outside directors on monitoring ma nagement they refer to for instance has been pro ven for female directors Adams Ferreira 2009 Lucas Pérez et al 2015 Nielsen Huse 2010 Economic arguments in favor of diversity support the view that board diversity results in higher firm performance The existence of such a positive re lationship is backed by consultancy firm McKinsey and non profit organization Catalyst Since 2007 McKinsey publishes an annual study called Wo men matter exploring female representation in the global workplace and its impact from different perspectives The 2007 study suggests that compa nies with high female representation on board and top management level also yield the best perfor mance The recent report consists of a qualitative and a quantitative study of the relationship bet ween women in top management teams and firm performance for a sample of European companies Catalyst fostering gender diversity in business conducts research on the relationship between the women s ratio on corporate boards and firm financial performance focusing on US enterprises Women on boards and in TMTs and firm performance